Health Insurance Premiums Skyrocket

TUESDAY, April 29 (HealthDay News) -- Employer-based health insurance premiums have skyrocketed at a pace that far exceeds the rate of American wage increases since 2000, a new study reveals.

According to an analysis of government statistics being released Tuesday by the Robert Wood Johnson Foundation (RWJF), the average dollar amount employees must pay per year for family health coverage went up by 30 percent from 2001 to 2005. During that time, incomes increased by just 3 percent.

"Nationally, insurance premium costs are going up ten times faster than people's incomes," said RWJF spokesman Michael Berman. "And in some regions, the gap is even greater. So what we've tried to do with this report is highlight for the nation's leaders what families already know; that it's getting harder and harder to afford health insurance in America."

The report is a state-by-state analysis of insurance coverage costs relative to income from the State Health Access Data Assistance Center (SHADAC), which is part of the University of Minnesota's School of Public Health in Minneapolis.

It was released as part of the organization's launch of its sixth annual "Cover the Uninsured Week," a nonprofit, non-partisan effort to increase awareness about insurance coverage issues. The campaign will be comprised of RWJF-sponsored health fairs, health insurance seminars, press events and community outreach programs across the country.

RWJF notes that currently 47 million Americans are uninsured, of whom almost 9 million are children.

In 2007, national health-care costs are estimated to have risen by 6.9 percent -- or two times the rate of inflation, according to the nonprofit National Coalition on Health Care (NCHC). While the RWJF notes that health-care spending now accounts for 16 percent of the nation's gross domestic product (GDP), the NCHC projects that by 2016 that figure will rise to 20 percent.

Similarly, the NCHC indicates that in 2007, employer health insurance premiums also rose at twice the rate of inflation -- by 6.1 percent.

The RWJF report is based on data drawn from the U.S. Agency for Healthcare Research and Quality's Medical Expenditure Panel Surveys, conducted between 2001 and 2005. SHADAC researchers also crunched numbers from U.S. Census Bureau information collected between 2001 and 2007.

The study's premium-to-income comparisons demonstrate that employees with health coverage are not, in fact, paying a greater proportion of their total family premiums since 2000 -- with employees continuing to carry a 24 percent burden of the full cost.

However, the report indicates that between 2001 and 2005, there was a 30 percent national rise in what employees must now pay for family coverage -- translating into an additional average yearly out-of-pocket expense of $664. In total, the average employee must now shell out $2,585 for family coverage.

Residents of some states actually experienced higher than average premium increases, with the hardest hit states being Oklahoma, Idaho, Texas, Oregon and Pennsylvania.

By contrast, the average income among Americans carrying family policies went up just 3 percent --or about $1,250 -- in the same timeframe.